Australian watchdog approves Qantas-Emirates agreement

Wednesday, December 26, 2012

The competition watchdog in Australia sees no issue with a proposed freight and passenger alliance between Emirates Airline and Qantas Airways, approving the draft agreement, subject to conditions, for five years.
“The ACCC considers that the alliance is likely to result in material, although not substantial, benefits to Australian consumers,” Rod Sims, chairman of the Australian Competition and Consumer Commission, said in a statement. “The ACCC is of the view that the main benefit arising from the alliance is an improved product and service offering by the two airlines to their customers.”
As for routes where Emirates and Qantas currently compete, which would likely see a decrease in offerings once the two carriers link up, the competition commission found there are currently enough alternative operators to make this anticipated decrease in services negligible. The group was concerned, however, about rates between Australia and New Zealand, proposing to limit the alliance’s activity on this route as a condition to the agreement.
The decision is not final, and the group is now taking feedback from the carriers and interested parties before making a final decision.
“Given the dynamic nature of the aviation industry, the limited extent
of public benefits and the significant role of the trans-Tasman capacity
condition in the ACCC’s decision, the ACCC considers it appropriate to
review this authorization earlier than the 10 years requested by Qantas
and Emirates," Sims said. "In the circumstances, the ACCC proposes to grant
authorization for five years." - Jon Ross